Finland’s Katainen to Resign in Bid for International Job

Jyrki Katainen, Finland's prime minister, gestures as he speaks during the World Economic Forum Annual Meeting Of The New Champions in Dalian, China, on Thursday, Sept. 12, 2013. Photographer: Tomohiro Ohsumi/Bloomberg

April 5 (Bloomberg) -- Finnish Prime Minister Jyrki
Katainen announced he will step down as leader of the
northernmost euro member to seek a career on the broader
European or international stage.

Katainen said his National Coalition Party will pick a new
leader in June, in an unscheduled speech in Helsinki today. The
new party leader will also take over as premier, he said.

“You can’t imagine how thankful I am to have been allowed
to lead the country during these hard years,” he said. “I have
worked on behalf of Finland through the crisis.”

Katainen, 42, has been struggling to revive a stagnant
economy since taking power in June 2011 and to find common
ground at the helm of a broad coalition. The Left Alliance this
week left the six-party government in protest over deepening
austerity measures designed to halt debt growth in the Nordic
nation. The premier has fought to maintain Finland’s AAA rating
throughout the region’s debt crisis.

The government has agreed to 6.6 billion euros ($9.05
billion) of measures to reduce the budget deficit. Finland this
week cut its economic growth forecast for 2014 to 0.5 percent
from the 0.8 percent estimated in December, in part as sanctions
against Russia are now also threatening the recovery.

‘Declaring Bankruptcy’

Three years of recession in the past five years have eroded
Finland’s public finances at the same as its export
cornerstones, papermaking and technology, have struggled with
competition and falling demand. General government debt will
breach the 60 percent Maastricht treaty threshold next year,
after reaching 59.8 percent in 2014, the ministry estimates.

The ideologically conflicted Cabinet persisted on
“pragmatism” since taking power, Katainen has said. It has
survived 15 confidence votes over less than three years.

“This amounts to the government declaring bankruptcy,”
said Timo Soini, head of the opposition The Finns party,
according to state-owned broadcaster YLE. “They either run off
to Europe or quit, like the Left Alliance did. If the prime
minister quits in the middle of the term, it’s hands up.”

Social Democrat Finance Minister Jutta Urpilainen is also
facing a challenge at the helm of her party, which is the
second-biggest in the government. The group meets in May to pick
a new leader. Finland will hold an election in April next year.

Katainen said he’s interested in international positions,
as the European Commission is set to change composition later
this year.

“I have to say the international world has pulled me in,”
he said. “It’s so rewarding to see my work can make a
difference internationally.”

Finland’s Olli Rehn, European Commissioner for Economic and
Monetary Affairs, is running for European Parliament in the May
elections as a candidate of the opposition Center Party.